New Modalities of International Food Assistance: A Review of the Evidence

1. New Modalities of International Food Assistance: A Review of the Evidence Joanna B. Upton Erin C. Lentz Christopher B. Barrett Cornell University Presentation at AAEA Annual Meetings Pittsburgh, PA July 2011 Based on chapter in forthcoming volume C. Barrett, A. Binder and J. Steets, eds., Uniting on Food Assistance: The Case for Transatlantic Cooperation (London: Routledge, 2011).

2. Motivation Expanding choices for food assistance: No longer just shipment of bulk food aid from a donor country. Evolving donor policies: 1. Local and regional procurement (LRP): LRP increased in value from 13% of all food aid in 1995 to 50% in 2009. WFP spent >$1.2 bn on LRP in 2010. 2. Increased use of cash and vouchers: Address access and use, not just availability issues. 3. Recent expansion of USAID prepositioning program New partners: Middle-income countries now providing food assistance.

3. Backup table • New Food Assistance Modalities

4. Motivation Modality choices differ in implications for different sub-groups Recipients: women, children, acutely malnourished… Non-recipients: neighboring food-insecure populations, producers, traders… Advantages and disadvantages depend on objectives and priorities…and program objectives are expanding. Cost, timeliness, security, consumption, nutrition, asset protection/creation, recipient preferences, price and market impacts Shortcomings in available evidence: Limited scope and scale of many new tools Absence of rigorous counterfactualslimits how sure we are of apparent differences in performance.

5. Motivation Key Food Assistance Program Objectives: 1) Cost Effectiveness 2) Timeliness 3) Security 4) Consumption and Nutrition 5) Assets and Welfare 6) Recipient Preferences 7) Price Impacts

6. Key findings 2 • 1) Cost • Broadly, from most to least costly: • prepositioned>transoceanic>LRP> vouchers > cash • But, we need to take into account specific objectives • Prepositioning entails additional storage costs • Relative costs of LRP depends on sourcing region; but LRP can entail significant cost savings • Evidence from East Africa: • CFGB: regional procurement 65-87% of the cost of importing Canadian grains • USAID: local procurement 54-77% of the cost of importing U.S. grains • Consider start-up costs of identifying buyers and verifying local quality standards • Costs of voucher and cash distributions vary

7. Key findings 2 • 2) Timeliness • Key comparisons (on average): • Transoceanic versus prepositioned: • Eastern Africa: time savings of up to 75% • Pakistan: 2-3 weeks for pre-positioned food from Djibouti (≥ 3 months for U.S. food) • Transoceanic versus LRP: • Varies by region, commodity, and timing… • US GAO: 10-country averages in sub-Saharan • Africa, 21 weeks for U.S food, 7-8 weeks for LRP • CFGB: Kenya, Ethiopia, & Afghanistan, 11-19 weeks for Canadian food, 4-6 weeks for LRP • Prepositioned versus LRP? Unknown • Cash/vouchers versus prepositioned/LRP? Unknown

8. Key findings 2 • 3) Security • Two dimensions: • 1) loss due to corruption • 2) risk of harm to recipients • Each modality has trade-offs for safety considerations • Visibility: is it a vice or a virtue…? • Evolving technologies can circumvent some security problems

9. Key findings 2 • 4) Consumption and Nutrition • Percentage of transfer consumed as food increases as one moves from cash to vouchers to food • But: • Most cash (60-90%) is spent on food, and • Food transfers are not necessarily consumed as food; sales to meet other needs are common • Cash recipients consume more diverse diets, but other modalities allow for targeting of specific nutritional objectives

10. Key findings 2 • 5) Assets and Welfare • Transfers can have asset effects: • Human capital effect on nutrition and health of recipients • Food aid in Ethiopia has been known to protect assets, by allowing recipients to avoid selling land and livestock • A portion of food assistance transfers is sometimes used to build assets

11. Key findings 2 • 6) Recipient Preferences • Recipients tend to prefer greater flexibility…but not always • The form of transfer may affect the balance of power within the household • Voucher and cash recipients may not be shielded from price increases

12. Key findings 2 • 7) Price Impacts (and implications for welfare, markets and agricultural production) • Deliveries of in-kind aid (whether from donor country or from a source market regionally or locally) represent a supply shock. Price effect ≤ 0. • LRP procurement or provision of cash or vouchers, represents a demand shock. Price effect ≥ 0. • Food assistance interventions can move local market prices, with varied production and welfare impacts. • The food price dilemma: • There are always winners andlosers, so need to be very explicit about priority sub-population(s).

13. Motivation • The importance of “Response Analysis” • Given multiple available modalities options and the lack of generalizable findings, choices must be considered on a case-by-case basis. • A combination (or sequence) of modality options is commonly preferable in any given setting. • There is as yet no generally accepted response analysis practice, but several frameworks have been developed (e.g., MIFIRA: Barrett et al., Food Security, 2009).

14. Motivation Coordination Donors have varying constraints Implementing agencies varying capacities and experiences Lack of coordination runs — perhaps significant—risks: Quite possible that different agencies are monetizing food and procuring food simultaneously in the same marketing system Opportunities for coordination at several levels: Regional (e.g., C-SAFE, the Consortium for Southern African Food Security Emergency) National (e.g., the Kenya Food Security Steering Group) Sector (e.g., the USDA LRP Learning Alliance)

15. Motivation Summary There is not (and is not likely to be) a generalizable ordering for which modality choices work best for providing food assistance to food insecure peoples. The right response depends on context and specific program objectives Systematic Response Analysis is needed to ensure that expanded toolkit leads to improved performance. Improved coordination is likewise essential so that agencies aren’t working at cross-purposes to one another.

16. Motivation Thank you for your time and interest Special thanks to Cheryl Christensen of USDA-ERS for organizing this session and kindly presenting on our behalf!